Gold prices fell more than 1% on Friday, heading for a weekly decline as strong US employment data weakened expectations of a rate cut. The non-yielding precious metal remained under pressure, particularly as the likelihood of a Fed rate cut in December decreased.
Gold prices fell 1% to $4,036.21 an ounce as of 10:56 GMT, bringing the week’s overall loss to 1%.
December US gold futures fell 0.7 percent to $4,033.30. WisdomTree commodities strategist Nitesh Shah commented, “The strong labor market outlook has blocked near-term interest rate cuts and has become a key pressure point on gold.” The delayed US employment report released on Thursday showed that non-farm payrolls rose by 119,000, significantly exceeding expectations, while the unemployment rate reached its highest level in four years. The probability of a Fed interest rate cut at its December meeting has fallen from 44 percent in the previous week to 33 percent in the markets.Cleveland Fed President Beth Hammack, however, pointed to inflation concerns and stated that caution should be exercised regarding interest rate cuts. Physical gold demand across Asia remained weak this week due to the fluctuating interest rate outlook.
Fundamentals Remain Strong
According to ANZ’s assessment, the long-term outlook for gold remains intact. Slowing economic growth, high equity valuations, geopolitical risks, and a trend of moving away from US assets will continue to support investor interest and central bank purchases.
Shah said, “I think the current levels in gold have formed a bottom. There may be short-term dips, but the overall trend will be upward in the coming months.”
Other precious metals saw declines: Spot silver fell 3.3% to $48.94, platinum lost 1.3% to $1,491.36, and palladium dropped 2% to $1,350.50.
